latest health care news

21.02.19

NHS pays £35m in tax penalties for staff breaching pension limits

Nearly £35m was paid by the NHS for thousands of staff members who broke limits on pensions savings, according to the Financial Times.

Data released to the FT by the NHS Business Services Authority reportedly shows that there were 3,949 requests to the NHS pension scheme in 2016-17 to pay annual allowance charges, with £34.7m paid in tax penalties to the authorities.

Last month, the BMA raised concerns over the number of doctors being unfairly hit by cuts to tax reliefs, and urged the government to lift the annual pension allowance for its members. Because of the gradual cuts to yearly savings limits, more and more doctors have ended up breaching their pension savings limit and hit with substantial tax bills.  

A BMA survey, also from last month, revealed that six out of 10 consultants revealed that they had plans to retire early, citing the penalties for breaching annual pension savings limits as a key factor in their decision.

BMA consultants committee chair Rob Harwood said: “It cannot be right that these unfair regulations are landing hard-working doctors with exorbitant tax bills for simply doing their jobs to the best of their abilities and are forcing them to cut back on the work they are already doing for the NHS.”

Harwood also noted that the tax penalties are “forcing people to cut back on the work they are doing before they are retiring,” citing the surveys finding that a third plan to halve their workload, and that 18% want to further reduce their hours.

“Our most expert and experienced doctors are being forced to retire early because of their lifetime commitment to the NHS,” he said.

“I have urged the removal of the annual and lifetime allowance cap for public sector workers.”

 

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